Speaking in Parliament on the issue, Minister for Foreign Affairs Vivian Balakrishnan also added that Singapore will fully honour the terms of the 1962 Water Agreement and expects Malaysia to do the same.

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SINGAPORE: Singapore is committed to engaging and cooperating with the new Malaysian government, said Minister for Foreign Affairs Vivian Balakrishnan in Parliament on Monday (Jul 9).

But working together, he stressed, must be on the basis that "both sides will fully respect the sanctity of international agreements, and that any disputes are resolved peacefully in accordance with international law".

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"Provided this condition is met, we are confident bilateral relations will prosper, for the mutual benefit of the citizens of both countries,” he said, in response to a parliamentary question filed by MP Christopher de Souza on the state of bilateral relations between both countries.

However, he noted that reports on the new Malaysian government’s 1MDB investigations, their intentions to cancel or postpone the Kuala Lumpur-Singapore High-Speed Rail (HSR) project, and their desire to revise the price of water sold to Singapore may have caused some to wonder about how these will affect bilateral ties.

Most recently, Malaysian Prime Minister Mahathir Mohamad had said that the water supply deal with Singapore was “too costly” and that his government needed to re-negotiate the agreement with its neighbour.

Going into details on the price of raw water imported by Singapore from Malaysia under the 1962 Water Agreement, Dr Balakrishnan reiterated Singapore’s “clear and consistent position” on the issue.

He said the water pact is no ordinary agreement, and is guaranteed by both Singapore and Malaysia in the 1965 Separation Agreement. The Separation Agreement, he added, was in turn registered with the United Nations.

“Any breach of the 1962 Water Agreement would call into question the Separation Agreement, which is the basis for Singapore’s very existence as an independent sovereign state,” he said.

“Singapore will fully honour the terms of the 1962 Water Agreement, including the price of water stipulated, and expects Malaysia also to do so,” he added.

Citing points previously made in Parliament in 2003 and 2014 by former Foreign Ministers S Jayakumar and K Shanmugam respectively, Dr Balakrishnan noted that the core issue is not how much is paid, but how any price revision is decided upon.

He also reiterated that neither Malaysia nor Singapore can unilaterally change the terms of the agreement between the two countries.

Under the terms of the 1962 Water Agreement, Johor currently buys treated water at 50 sen per 1,000 gallons from Singapore. This, said Dr Balakrishnan, is a “fraction of the cost” to Singapore of treating the water.

“Malaysia has previously acknowledged that they themselves chose not to ask for a review in 1987 because they benefited from the pricing arrangement under the 1962 Water Agreement,” he said.

He added that in 2002, then-Malaysian Prime Minister Dr Mahathir had said that Malaysia did not ask for a review when it was due as it knew that any revision would also affect the price of treated water sold by Singapore to Malaysia.

If Malaysia had exercised the right to review the price of water then, Dr Balakrishnan said, Singapore might have made different investment decisions on developing the Johor River and its water catchment areas.

STABLE AND PROSPEROUS MALAYSIA GOOD FOR SINGAPORE, REGION

Dr Balakrishnan said that a stable and prosperous Malaysia is good for Singapore and the region, and there has been a "high tempo" of bilateral exchanges since the Malaysian General Election in May.

He spelled out three fundamental principles of Singapore’s foreign policy that he said were “especially salient” with its relationship with Malaysia. The first - upholding international law and respecting the sanctity of international agreements - is “critical” for a small state like Singapore, Dr Balakrishnan said.

“Our very existence as a sovereign independent state is derived from the Separation Agreement of 1965,” he said.

“International agreements, solemnly entered into by countries, are sacrosanct and they underpin the relationship between sovereign states. They make it possible for countries to co-exist peacefully, to build trust, to work together for the long-term good of our citizens, regardless of changes of governments or circumstances.”

The second principle: Any disputes that arise should be resolved in accordance with international law. He brought up the Pedra Branca dispute as an example of how both Singapore and Malaysia had followed the “due legal process”, handled the issue in accordance with international law, and put the matter to rest amicably.

The third principle, Dr Balakrishnan said, is about upholding Singapore’s reputation as a credible, trusted and consistent partner, and a country that abides fully by its international obligations.

“This reputation, for Singapore, developed over decades, is crucial for our political and economic space,” he said.

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